Authorities Shut Down Spam Ring: e-mail sent over the Internet ... NY Times October 15, 2008

[Guest guest]

http://www.nytimes.com/2008/10/15/technology/internet/15spam.html Authorities Shut Down Spam Ring By

BRAD

STONE NY

Times October 15, 2008

The Federal Trade Commission won a

preliminary legal victory against what it called one of the largest spam

gangs on the Internet, persuading a federal court in

Chicago on Tuesday to freeze the

group’s assets and order the spam network to shut down. The group, which used

several names but was known among spam-fighting organizations as HerbalKing,

sent billions of unsolicited messages to Internet users over the last 20

months, promoting replica watches and a variety of pharmaceuticals, including

weight-loss drugs and herbal pills that supposedly enhanced the male anatomy,

according to the commission. “This is pretty

major. At one point these guys delivered up to one-third of all spam,”

said , chief information officer at SpamHaus, a nonprofit antispam

research group. The investigation

provides a clear window into the business of modern spam, which by some

estimates accounts for 90 percent of all e-mail sent over the Internet. To pepper Internet

users with its solicitations, the HerbalKing group used a botnet, a global

network of computers infected with malicious software, often without the

knowledge of their owners. The security firm

Marshal Software, which assisted the F.T.C. with the investigation, estimated

in court documents that the group’s Mega-D botnet — named after one

of its pill products — was made up of 35,000 computers and could send 10

billion e-mail messages a day. In January, the botnet was the leading source of

spam on the Internet, the firm estimated. F.T.C. investigators

also said they monitored the group’s finances closely and that it cleared

$400,000 in Visa charges in one month alone. The commission has

brought more than 100 cases against spammers and spyware vendors over the past

decade. But officials and investigators said this spam operation was perhaps

the most extensive they had ever encountered, with ties to

Australia , New

Zealand , India ,

China and the

United States . “They were

sending extraordinary amounts of spam,” said Jon Leibowitz, an F.T.C.

commissioner. “We are hoping at some level that this will help make a

small dent in the amount of spam coming into consumers’ in-boxes.” The commission asked

the federal district court in Chicago to freeze the gang’s finances, arguing that its members were using unfair

and deceptive advertising practices and violating the Can-Spam Act of 2003.

That federal law provides civil and criminal penalties for spammers who falsify

information in e-mail messages and fail to offer ways for consumers to refuse

further messages. The government is also

pursuing criminal charges against the group. F.B.I. investigators in

Chicago and

St. Louis have executed search warrants

against members of the spam gang, the commission said. Jody ,

29, of McKinney, Tex., was involved in the group’s finances, according to

the F.T.C. Reached at his home, Mr. said: “I don’t even know

who these people are who I have been tied to,” and referred all inquiries

to his Dallas lawyer, R. Teakell. Mr. Teakell did not immediately respond

to a request for comment. United

States

officials are also working with New Zealand authorities in the case against Lance Atkinson, 26, a native of

New Zealand who now resides in

Australia . Mr.

Atkinson has a history in the spam business. In 2005, the F.T.C. obtained a

$2.2 million judgment against him and a business partner for running a similar

operation selling herbal pills online. In conjunction with

the investigation in the United States, the Department of Internal Affairs in

New Zealand asked a court on Tuesday to impose a fine of 200,000 New Zealand

dollars, or $121,000, on Mr. Atkinson, his brother Shane Atkinson and a

business partner for violating the country’s own spam laws. The activities of the

HerbalKing group, like those of other criminal groups online, were remarkably

international in scope. The group was shipping drugs like Propecia, Lipitor, Celebrex and Zoloft out of India. The F.T.C. also said

the group based its Web sites in China ,

processed credit cards from the former Soviet republic of Georgia and

Cyprus , and

transferred funds among members using ePassporte, an electronic money network. As part of its

investigation, the commission purchased the “herbal” pills from the

group and asked the Food and Drug Administration

to test them. That agency found that the pills contained sildenafil, the active

ingredient in Viagra, which can be risky for some

people with heart conditions. Antispam researchers

lauded the crackdown and said it would send a strong message to other spammers.

But they were not confident that spam volumes would decrease. “This will send

some real shock waves through the spamming industry, but even if these guys

were running a substantial botnet of compromised computers, there are always

spammers looking to take their place,” said Graham Cluley, a senior technology

consultant at Sophos, a spam-fighting security firm. “It wouldn’t

be a surprise if people don’t notice any difference in their in-box

tomorrow morning.”